Tanu Kumar

The importance of protecting New York manufacturing

Despite the popular conception that American manufacturing is becoming obsolete, many parts of the country, including New York City, offer examples of blue collar rebirth. In a recent Wall Street Journal editorial, entitled "The Myth of Deindustrialization", scholar Joel Kotkin offers a brisk survey of manufacturing across the country, evidence of a thriving and sustainable industrial sector. Yet, he checks his optimism when broaching the issue of big city industry. Citing New York, he states that "[it] continues to hemorrhage its manufacturing jobs," in favor of policy geared at information age industries. While certainly grounded in some truth, Kotkin's bold proclamations overlook some important policy decisions New York has taken in protecting its vibrant manufacturing sector, notably the creation of Industrial Business Zones and the Mayor's Office of Industrial & Manufacturing Businesses. Recently, the City added one more component to its industrial policy with the welcome passage of Local Law 37.

Local Law 37 institutionalizes stiff and much needed penalties for illegally converted manufacturing space and should offer some baseline protection for firms against residential flipping. The illegal conversions of industrial spaces, even within designated Industrial Business Zones (IBZs), have continually threatened the ability of manufacturing to survive New York City's economic growth. The legislation is critical in an environment where small businesses have been forced to compete with an aggressive real estate market, populated by industrial buildings converted to residential use and renting for at least three times as much as manufacturing space.

The cumulative results of these conversions are staggering. For example, a study of the East Williamsburg In-Place Industrial Park completed by the New York Industrial Retention Network (NYIRN) in 2004 found that 27 industrial buildings had been illegally converted, representing a loss of 500,000 SF of manufacturing space, or enough space to house 1,000 jobs.

Local Law 37 is an excellent start. However, the legislation is only effective if strict enforcement is established. In the long-term, Local Law 37 must be endorsed as part of a stronger and more comprehensive policy that retains and grows industry, including stronger land-use protections, enforcement tools, and technical assistance. Otherwise, companies will remain haunted by a specter of potential rezonings and real estate speculation and will ultimately be driven out, taking a good portion of the City's economic diversity and good, well-paying jobs with them.

All comments, ideas and thoughts on DMI Blog are property of their authors. Reasonable excerpts are permitted on other sites and blogs; otherwise reproduction without the author's permission is strictly prohibited. View our comment policy here.

All opinions expressed on the DMI Blog website are solely those of their authors, and do not necessarily reflect those of the Drum Major Institute for Public Policy.